Economic Aspects Of Southern Sectionalism, 1840-1861 Russel

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#1
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel

A bit dated(Originally published: 1924 ) but free to read online. Let us remember slavery is behind the curtain and concentrate on this article/book.
Also beware of biases because the financial/industral North won the Civil War.

Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861 Emphasis mine.
Preface
The object of this monograph is to attempt to evaluate some of the causes for the secession of our Southern states which, to me, seem generally to have been underestimated. Lack of time has prevented the utilization of much available newspaper, pamphlet, and manuscript material of considerable value; but great confidence is felt that the evidence is typical, if not exhaustive. The work deals with matters which even today in a measure arouse the passions or prejudices of men; the greatest effort has been made, therefore, to preserve a detached point of view. A better contemporary understanding of the economic relations of the sections before 1861 might have moderated the bitterness of the sectional controversy; a better understanding of them even now would soften its memories.​
Introduction. P10

The most significant fact of American history from about 1820 to 1875, at least, was sectionalism. The section which was at all times most clearly defined was the South. The term South, however, did not have the same connotation at all times and to all men. Until about 1845 the term South was commonly applied only to the South Atlantic states. The states of the lower Mississippi valley were gradually brought under the term as their economic and social organization and general conditions approximated those in the old South and differentiated from those of the states of the upper part of the valley, for Southern sectionalism had bases in several distinctive features besides latitude.​
Get this out of the way

Foremost of these was the existence of slavery.​
P11

There was basis for sectionalism, also, in divergent economic interests and conditions. To what extent the divergence was due to geography, to what extent due to other factors, including social organization, it is not necessary here to inquire. The Southern states, however, were engaged largely in the production of a few great staples cotton, tobacco, and sugar not produced in other states of the Union. Of these staples only a small proportion was consumed at home; much the greater part was exported either to the North or to Europe. The portion exported abroad constituted considerably more than half the nation's total exports. Manufacturing and mining had made, and were making during the period under survey, little progress in the South compared with the same industries in other sections; the exports of the South were exchanged in part for agricultural products of the West but chiefly for manufactured goods of the East or Europe. The ocean commerce of the South, whether coastwise or foreign, was carried almost altogether in Northern or European vessels; foreign goods for Southern consumption came largely by way of Northern ports. Only a small percentage of the Southern population was urban; the cities and towns of the section were few and small compared with those of the East or even those of the growing Northwest. The banking capital of the country was largely concentrated in the East; the South was not financially independent.
P12-13

Divergent economic interests of the sections led to the advocacy of different policies, on the part of the Federal government, as regards tariff, taxation, navigation laws, and the amount and objects of government expenditures. The disparity of the sections in industry and commerce was to many Southerners evidence of lack of prosperity in the South commensurate with that of the North, and, consequently, was a cause of dissatisfaction, and was galling to Southern pride. The causes of Southern "decline" were sought for; it was variously attributed to geography and climate, qualities of the people, misdirection of private enterprise, mistaken policies of the state and local governments, and the unequal operation of the Federal government, but not, generally, to slavery. Remedies were proposed, corresponding roughly to the causes, as analyzed.​
The article says it will look at Southern opinion and how divergent economic interest and conditions drove Southern secetionism.

It is the purpose of this study to attempt to discover to what extent Southern sectionalism had its basis in divergent economic interests and conditions. The study is primarily a study of public opinion. It will require an examination of the opinions of Southern men as to the divergence of economic interests and the extent of the disparity of economic development in the sections, the causes of such disparity, and the proper remedies therefor. Actual economic conditions and changes will be described and explained only in so far as such description and explanation are essential to an understanding of Southern public opinion. It is hoped, however, that incidentally some additional light may be thrown upon the economic status of the antebellum South, and that some conclusions may be drawn as to the justification for Southern discontent.​

 

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#2
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861 Emphasis mine.

Chapter I agitation in behalf of direct trade with Europe, 1837-1839

The short story is that Southerners resented Northern economic dominance. They had a lot of meeting with little result.

Prior to Independence Southern ports imported and export the same as the Northern but after independence imports stagnated. Exports(Cotton?) grew very rapidity. From the available records, The South did not consume their proportionate share of imports.

In colonial days the exports and imports of the Southern colonies compared very favorably in amount with those of the Northern; but shortly after independence from Great Britain was achieved, it became apparent that the importing business of the nation was being concentrated in Northern ports. As the years went by the concentration became more and more pronounced. While the exports of the staple producing states grew at a phenomenal rate, the value of the imports into Southern ports remained almost stationary or grew very slowly. This was particularly true in the case of the Atlantic ports. In the case of New Orleans, for long almost the sole outlet for the commerce of the rapidly filling Mississippi valley, there was early in the last century phenomenal increase in both exports and imports; but after about 1835 the latter increased very slowly, while the former continued to grow at the same remarkable rate. Prior to the Civil War the imports of the Northern states greatly exceeded their exports. In the Southern States the reverse was the case. A com- parison of the exports from all Southern ports with those from all Northern ports shows that after about 1830 the former always exceeded, and sometimes greatly exceeded, the latter. The imports of the Southern ports, however, were only a fraction of the imports of Northern ports, and became proportionally less as the years went by.1 If the growing superiority of the North in population be remembered, and the comparison be made on the basis of population, the disparity is still striking. It indicates that either the people of the South did not consume their proportionate share of the nation's imports, or that Northern merchants imported largely on Southern account, or both.

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Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861 Emphasis mine.
P15


A study of the growth of population of Northern and Southern seaports likewise reveals a growing disparity in favor of the former.2 The antebellum South had no large and growing ports except New Orleans and Baltimore, the latter of which was on the line between the two sections.

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#4
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861 Emphasis mine.
P16

The North had far more merchant vessels suggesting that most Southern exports were carried in Northern ships.

The available statistics of the shipping built or owned in the two sections again reveals a disparity in favor of the North as great or greater than that in the value of imports or the population of the seaports. If the comparison be limited to vessels engaged in the foreign trade, it is even more to the advantage of the North.3 These facts would seem to indicate that the foreign commerce of the Southern states was carried largely in Northern or foreign vessels, and that the coasting trade of the South, if large, must have been conducted largely in Northern vessels.​

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#5
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861 Emphasis mine.
P16-17
I'll be skipping over detailed descriptions of the meetings to save time.

The "commercial" dependence on the South generated a lot of talk. It was recognized that the lack of opportunity meant slower population growth and a threat to political power.


The comparative growth of Northern and Southern seaports, the tendency to concentration of the importing business of the United States in Northern cities, especially New York, and the disparity between the shipping industries of the two sections, in short the "commercial dependence" of the South upon the North, were matters which received considerable attention in the antebellum South, not only from citizens of the seaports themselves but from the section as a whole. Southern men quite generally looked upon commercial dependence as evidence of the failure of the South to prosper as it should. They gave consideration to the relation of commercial dependence to the comparatively slow accumulation of mobile capital in the South and to the inadequacy of credit facilities, because of which they were handicapped in their efforts to construct internal improvements and to develop the varied resources of the section. They canvassed commercial dependence as a cause for the slower increase of population in the South than in the North a matter of much concern because of its bearing upon the sectional struggle over slavery. The causes of commercial dependence were sought, therefore, and efforts were made to devise and apply remedies.​
Several meetings by concerned folks were made in Georgia(1837), South Carolina(1838), and Virginia(1839).
The whole subject was first thoroughly discussed, and the first efforts made to effect a revolution in the manner of conducting Southern commerce, by a number of direct trade conventions which met in Georgia, South Carolina, and Virginia in 1837, 1838, and 1839.​

3 Meetings to make a new organization of Southern relations with Europe--More direct trade--cut the Northern shippers out of he equation.

It(crash of 1837) was seized upon as affording a good opportunity for attempting to effect the establishment of direct trade and a change in the method of marketing cotton. With these objects in view, William Bearing and other gentlemen, of Athens, issued a call for a convention to meet in Augusta in October, 1837. The call stated that a crisis had arrived in the commercial affairs of the South and Southwest, "the most favorable that has occurred since the formation of the American government, to attempt a new organization of our commercial relations with Europe."6 The first Augusta convention was followed in April and October, 1838, by a second and a third and, in April, 1839, by a fourth, in Charleston.​
These were well attended, 100-200 attendees, from mainly Georgia and South Caroling, but had a scattering of other States. The focus was mainly economic. The attendees were from many occupations.
Each of this series of conventions was composed of from one hundred to two hundred delegates, elected by local meetings. The great majority in each case was from Georgia and South Carolina, but there were scattering representatives from North Carolina, Tennessee, Alabama, and Florida Territory, and an attempt was made to enlist as many Southern states as possible. Although the state rights, anti-tariff men gave tone to the proceedings, the conventions were bi-partisan in composition; they were not got up for partisan purposes, and party politics played a minor part in their deliberations. Among the delegates were bankers, merchants, and planters, as well as men active in politics.​

These meetings had a lot of local interest, there were local meetings and newspaper articles.

The presence and active participation of such men are sufficient to indicate the deep interest in the objects of the conventions.​
Numerous local meetings and the accompanying press discussion give testimony to the same effect. In addition to the debates and resolutions and the newspaper comments, the views, objects, and plans of the conventions were set forth in several quite able addresses and reports.​
Footnotes.
'Charleston Courier, Oct. 7, 1837.
*Niles' Register, LV, 43, 189. The delegates of the third Augusta convention
presented William Dearing with a silver cup in recognition of his part in inaugu-
rating the direct trade conventions.
"Charleston Courier, Aug. 14, 1837.
'Calhoun to Sidney Breese, July 27, 1839, Calhoun Correspondence.
*Charlestown Courier, Oct. 24, 1837.
DeBow's Review, IV, 208 ff.
"Report is in Savannah Daily Republican, April 6, 9, 19, 1838. The address
is in the Charleston Mercury, Aug. n, 1838; DeBow's Review, XIII, 477-
93; Niles' Register, LV, 40 f.
"DeBow, Industrial Resources of the South and West, III, 92-111.
"DeBow's Review, IV, 493-502; DeBow, Industrial Resources, etc., Ill, m-
116.
 

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Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
P19-20

The complaints about the North were:
  1. South was in ""state of commercial dependence,"
  2. The exporting South should also receive its imports.
  3. The South exported 2/3 of exports but received only 1/10 of the import.
  4. Francis Mallory estimated that 9/10 if the exports went to Europe while 7/10 of imports came indirectly by way of Northern Seaports. (I am not sure if this is total consumable imports or alleged imports to the South implying the North consumed only 2/10s of imports.- 1/10 to the South 7/10s to the North is a total of only 8/10s.
  5. Imports in Charleston decreased very much. Millions to 1/2 million dollars 1807-1833
  6. Agents of Northern and English Firms exported Southern goods instead of Southern agents.
  7. Southern seaports were dominated by Northern agents and factors sucking the wealth to the North.
  8. Northern banks financed direct sales and purchases by Northerners on Northern Steamboats
  9. Southern merchants in the interior away from the river purchase their stocks in the North.
There was substantial agreement in all of the conventions in regard to the manner in which Southern commerce was conducted, the evils attendant thereon, and the benefits to follow the establishment of direct trade with Europe. The staple growing states were described as being in a "state of commercial dependence, scarcely less reproachful to their industry and enterprise than it is incompatible with their substantial prosperity."16 That would be more natural than that those who furnished the nation's exports should also receive its imports? Yet, while the South furnished two-thirds of the exports, she received directly only one-tenth of the imports of the United States. Francis Mallory estimated that nine-tenths of the exports went directly to Europe, while five-sevenths of the imports from abroad came indirectly by way of Northern seaports. The direct imports of Charleston were said to have amounted to several millions in 1807; by 1833 they had dwindled to one-half million; since that time they had gradually increased, but were still insignificant.17 The same was said to be true of Virginia. At the time of the Revolution exports and imports had been equal; from that time to 1831 imports had steadily declined; since 1831 there had been some, though not marked, improvement.18 Though Southern exports went directly to Europe, the business was not conducted by home merchants, but chiefly by agents of Northern and English firms. Southern seaports were described as mere appendages of Northern seaports, "places where their agents and factors do business, and who, having but little local interest, withdraw from them after a few years residence, with all their gains, to swell the wealth of the place of their early affection and attachment."19 In Virginia, Northern steamboats often went up the rivers buying and selling directly to the farmers, the lumbermen, and the country merchants; the cargoes were paid for by bills on New York, and the money never entered Virginia. Interior merchants purchased their stocks in New York, Philadelphia, or Baltimore without the intervention of jobbers in Southern ports.20​
Footnotes
14Richmond Enquirer, June 22, 1838.
14Ibid., June 26, 1838; June 19. Mallory's report may be found in pamphlet form also.
15Ibid., Nov. 30, 1838. In addition to the reports already mentioned, were a "Report on Manufactures" and a "Supplementary Report on Manufactures, both adopted by the Richmond convention. Ibid., June 26, 1838.
16Charleston Courier, Oct. 24, 1837, report of the general committee of the
first Augusta convention.
17Savannah Daily Republican, April 7, 1838, report of the general committee
of the second Augusta convention.
18Richmond Enquirer, June 26, 1838, Mallory's report.
19Richmond Enquirer, June 26, 1838, Mallory's report.
20. IBID.
 
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Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
P20-21

The Yankees were rolling in money the South deserved or at least speakers at the conventions suggested. Lots of figures presented without references. However, it is what these Southerners believed.

The profits Northern merchants and shippers made from conducting Southern commerce were believed to be very great and to account in large measure for the prosperity of Northern cities, while the loss of those profits explained the impoverishment of the cities of the South. The address issued by the second Augusta convention, after estimating at $630,000,000 the duties paid by the Southern states since the establishment of the Constitution of the United States, continued:​
If we suppose the value of the goods upon which the six hundred and thirty millions of duties were levied, to have been but four times the value of the duties, it amounted to $2,500,000,000. How were these goods brought to this country and distributed? The northern merchant has come hither and bought from the southern planter produce of equal value, abating from the price all the expenses, direct and incidental, of transportation. He has insured them in northern offices, and shipped them abroad in his own vessels exchanged them at a small profit for foreign merchandise brought it home paid one-fourth its value to the government added that amount and all the expenses of importation, and fifteen to twenty percent, for his profits, to the price, and exposed it for sale. The southern merchant has now gone to him lingered the summer through at heavy expense bought a portion of the goods, reshipped them in northern vessels to southern ports added twenty-five percent, more to the price, to cover his expenses and profits and sold them to the southern planter. All the disbursements made in this process, save such as are made abroad, are among northern men; all the profits, save the southern merchant's, are made by northern men . . . Every item in the endless catalogue of charges, except the government dues, may be considered a voluntary tribute from the citizens of the south to "Richmond Enquirer, June 26, 1838, Mallory's report. their brethren of the north; for they would all have gone to our own people, had we done our own exporting and importing.21
At Charleston, Robert Y. Hayne quoted a report of a committee of the Alabama Legislature in which it was estimated that over one-third the price of cotton went to New York agents and shippers. Hayne himself was content to put the tolls at 10 or 15 per cent.22 George McDuffie thought the "voluntary tribute" paid annually to the North for carrying Southern commerce amounted to $10,000,000.23 A Virginia delegate said the state could save $1,000,000 annually by importing directly.24 But this direct annual drain was not the only loss occasioned the Southern people; there were also the "consequential losses," that is, the capital which would have accumulated had the South conducted her own commerce. Commercial dependence had operated to prevent the accumulation of capital in the South, and the deficiency of capital had handicapped enterprise.

Footnotes.

22Niles' Register, LV, 41.
23DeBow, Industrial Resources, III, 93.
24Charleston Courier, Oct. 24, 1837, report, first Augusta convention.
 
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#9
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
P20-21

Take financial control from the North and great things will happen. "the one people has risen like the rocket, and the other has fallen like its stick"

The greatness of New York City was pictured all said to have been built upon Southern staples and Southern trade. "You hold the element," ran the address of one of these conventions, "from which he derives his strength, and you have only to withdraw it to make him as subservient to you, as you now are to him. You have but to speak the word, and his empire is transferred to your own soil, and his sovereignty to the sons of that soil."25 But the benefits were not confined to New York; the virtual monopoly of Southern commerce had "either directly or indirectly made the whole of the North and Northwest what they are," according to the call of the first Augusta convention.26 Because of it, "the one people has risen like the rocket, and the other has fallen like its stick their positions must have been reversed, if the southern people had maintained their foreign trade."27 Glowing descriptions were given of the prosperity of Southern states and cities after direct trade should be restored. Were direct trade established, according to the address calling the second Augusta convention, "there would be an end to the unequal barter of which we have spoken. The doleful cry for northern funds would be hushed. The speculators upon southern distress would cease. The disorders of the currency would be healed. The relation of the commercial agency would be changed. They would be acquaintances and friends, identical in feeling and interest; enjoying mutual confidence, and interchanging mutual favors .... The fountain and the streams of commerce lying all within our land, would enrich it to an extent that none can foresee. Our works of internal improvement would receive a new and ever-accelerating impetus. Our drooping cities would be revived our creeping commerce winged; and all the blessings, physical, moral, and intellectual, which invariably accompany affluence and independence, would be ours."28
Footnotes
25Niles Register, LV, 43, second Augusta convention.
26Charleston Courier, Aug. 14, 1837.
27Niles' Register, LV, 42.
28 Niles Regiser, LV, 43. Cf. Richmond Enquirer, June 26, 1838.
 

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#10
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
PP22-24

The search for reasons. One thing for sure it will not be southerner's fault.
The North was richer, so it became richer. Southerners did not have access to capital.

In regard to the causes for the "decline" of the shipping and the import trade of Southern ports, the conventions exhibited differences of opinion. First, there was the view that for many years the North had possessed great advantages over the South for these lines of business by reason of its superior wealth and larger accumulations of capital. Not only must ship owners and importers be men of large capital, but they must have the backing of wealthy communities.​

It was the government's fault. How this happened with Southerner's either in charge or having a say in government is not mentioned.

And men of the South Carolina school, the followers of Calhoun and McDuffie, who predominated in the Augusta and Charleston conventions, were ready with explanations for the more rapid accumulation of capital in the North than in the South. It was, they said, because of the unequal operation of the Federal government. The tariffs had long enriched the manufacturing sections at the expense of the agricultural. Furthermore, while the people of the South had paid their proportionate share of the Federal revenues, these revenues had been disbursed chiefly in the Northern cities, and this process, going on year after year, had transferred a stag-low total from the one section to the other. A minority report in the Richmond convention rehearsed the old story of the as- sumption of the state debts by the Federal government and the refunding of the national debt carried out under the guidance of Alexander Hamilton. The refunded debt had been distributed between the North and South in the ratio of three to one, and, because of this inequality of distribution, had acted as a mortgage of the one section upon the other, great sums having been transferred from the South to the North in the form of interest paid to Northern bondholders from the common treasury.29 It was claimed, also, by men in these conventions, that for long the funds of the Federal government had been deposited almost altogether in Northern banks, thus giving Northern business men a decided advantage over Southern in the ability to secure financial assist- ance. Those who held these views of the causes of Southern de-cline saw basis for hope for revival in the gradual reduction of the tariff, according to the provisions of the Compromise Tariff law of 1833, the recent extinguishment of the national debt, the destruction of the United States Bank, and the evidence of a new policy in distributing deposits of the public funds. '​

Southerners were unable to obtain to obtain long term credit. Southern banks did not lend longterm so the Notherners had an advantage. Northerners had an advantage.

Another alleged cause for Southern commercial dependence, closely related to the one just mentioned, was the inadequacy of credit facilities. An examination, however cursory, of business methods in the South in that period makes it clear that a successful importing firm would have to command very great resources of capital or credit or both. It was proverbial that the planters lived each year upon the prospective income from the next year's crop. The country merchants, who extended them long credit, could not buy, therefore, except on long time. Importers, who bought on sixty or ninety days time, had to sell to the merchants upon from six to twelve or sixteen months. Country merchants were sometimes unwilling to give negotiable notes; they considered a request to do so a reflection upon their business integrity.30 Southern importers and jobbers did not, unaided, possess the means, and Southern banks were unable to lend them sufficient support, to enable them to extend to retail merchants the long credits which the latter received in the North.​

More credit issues. McDuffie said if planters did not borrow, that would help finance direct importation.

A correspondent of the Charleston Courier attributed the loss of foreign trade to the fact that country merchants began to buy of Northern jobbers because of the longer credits obtained.31 Robert Y. Hayne enumerated long credits as one of the causes of the decline of Southern commerce.32 McDuffie said he confidently believed that, if the planters would "adopt the system of expending, in the current year, the income of the year preceding .... it would dispense with one-half of the capital that would otherwise be necessary for carrying on our foreign commerce by a system of direct importation."33 One of the questions dividing public opinion in Virginia in that period was the policy of authorizing an increase of bank capital in the state. It was the subject of animated debates in both the Richmond and the Norfolk conventions. Those favoring the increase thought the unwise policy of the legislature in refusing the authorization largely responsible for the decline of direct trade in Virginia.​
After bashing the government, they looked at other causes, Imports dropped simply because Northern factories made the same thing as was formerly imported. There was a Southern prejudice again nonagricultural business. Capital flowed to slave grown cotton.

It is to the credit of the men of these conventions that they recognized other causes for Southern commercial dependence than the action or non-action of the Federal and state governments. They recognized that agriculture had in the past proved more attractive to capital than the shipping or mercantile business; land and negroes had been considered the best investments. The existence of a prejudice against other pursuits than agriculture and the professions was admitted. Some were willing to credit the people of the North with habits of industry not possessed by their own people and with a superior commercial enterprise; they spoke of the "voluntary tribute" which the South paid the North. The able report of the general committee of the Norfolk convention, read by John S. Millson, traced the decline of Virginia's foreign commerce to a very early date. Before the Revolution, the report said, business was conducted by British capitalists, and even then the Resident merchants were foreigners. At the time of the Revolution, British capital was withdrawn. True, the same thing happened in the North, but to a less degree, and the North was better pre war to take the place left by the British. Furthermore, agriculture became unprofitable in the North at an earlier day than in the South, and capital had been diverted to other industries. The committee further candidly admitted that "the decline of a with considerable portion of our foreign import trade may be accounted for in the fact that we now derive from the Northern states many of those articles that we formerly imported from abroad." Such a diversion of trade was not a subject for regret.34 A committee in the Charleston convention likewise reported that the consumption of domestic goods had increased greatly, was still increasing and was estimated by merchants to extend already to one-third of the whole consumption. The committee believed, however, that the quantity of foreign goods consumed in the South was sufficient to justify merchants in Southern seaports embarking in the importing business and to enable them to compete with Northern importers, who, of course, supplied a larger demand.35​

Footnotes
SBRichmondEnquirer, June 26, 1838, Mallory's report.
**Ibid., June 22, 1838, remarks of Mr. James and Mr. Caskie; June 26, 1838,
Mallory's report."Oct. 17, 1837.82
DeBow, Industrial Resources, III, 98.
"DeBotv's Review, IV, 221.
"Richmond Enquirer, Nov. 30, 1838.
 

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#11
Enjoying reading these. While some of the observations of the disparities between the economies of the North / South were valid, what could the South do to rectify the situation? While she had great wealth, she did not have enough liquid capitol for any large scale internal improvements / investments to redirect the flow of exchange to her region. And if she had, where would all the manpower come from to operate these enterprises? She was feeling the pressures of not having enough bodies to complete the work that was already there.

The list of 'complaints' appears to be a listing of observations of the results of her historical investment choices.

All that aside, how was seceding going to correct any of those perceived economic injustices?
202

Cheers,
USS ALASKA
 
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jgoodguy

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#13
Enjoying reading these. While some of the observations of the disparities between the economies of the North / South were valid, what could the South do to rectify the situation? While she had great wealth, she did not have enough liquid capitol for any large scale internal improvements / investments to redirect the flow of exchange to her region. And if she had, where would all the manpower come from to operate these enterprises? She was feeling the pressures of not having enough bodies to complete the work that was already there.

The list of 'complaints' appears to be observations of the results of her historical investment choices.

All that aside, how was seceding going to correct any of those perceived economic injustices?

Cheers,
USS ALASKA
The preceding posts are in the 1840s 20 years before secession. To get to secession there must be sectionalism first. In this thread, we are looking at how economics drove the division into Southern sectionalism. So far we see that economic resentment is one motivation for sectionalism. I see a lot of I see if wasn't for those durn Yankees sucking the money from us, we would be great. In secession, I see if it wasn't for those durn Yankees, we would be great.
 

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It does look like some of the complaints about the economic disparity were justified, enough so that they met to address the problem over multiple years. I wonder why more did not ultimately come of those meetings?
We are getting there. IMHO it is rather like the agitation for Black Confederates, demand was there when losing, not there when winning. Likewise, when the economy was bad, all sorts of suggestions were made, when the economy was good; go invest in cotton, land, and slaves.
 

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#15
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
PP 25

Northern port geography did not have anything special. The natural course, therefore, was for direct trade to come South, the indirect route was 'unnatural' enriching the Northerners unjustly. Ocean going ships entered Southern ports in ballast(rocks etc to keep the ship stable) so cargo could be hauled instead. Shipbuilding and owning was not emphasized, just keeping profits South. Some suggested that Southern Cities were unhealthy because of Yellow Fever, but that was denied.

It was generally denied that Northern seaports possessed any natural or physical advantages over Southern seaports for conducting foreign commerce. The direct course of trade was the natural course, and the indirect the unnatural. Direct trade would save one set of jobbers' profits, the cost of shipping coastwise, the difference between the discount of Southern notes in New York and Charleston (or the cost of whatever other mode of payment was employed), and the expenses retail merchants incurred in going North to lay in their stocks. Southern harbors were said to be as good as Northern. However that may be, it is certain that ocean going vessels entered Southern harbors to receive their exports. These ships often came in ballast, and, it was reasonably argued, would be willing to carry imports at low freights. Shipping was considered adequate, though there was recognition that regular packet lines were needed.36 The South was said to have timber for ship-building; but, in the thirties, not much was said about the desirability of promoting ship-building or ship-owning: the big object was to save the "importers' profits." Now and then someone suggested that the importing business in Southern cities was rendered precarious by visits of yellow, or "strangers'," fever; but residents of the South were generally ready to defend their coast cities against the prevalent belief that they were unhealthy.37​
Footnotes​
**DeBow's Review, IV, 495, Elmore's report.

It is a rather significant commentary, however, that much of the import
trade of Charleston was made by her own merchants through New York, the
goods being transhipped there. DeBow's Review, IV, 499.

DeBow, Industrial Resources, III, 98; Buckingham, Slave States of America, I, 67 ff. In 1838, Charleston experienced the most costly epidemic of yellow
fever of her history to that time. The severity of the epidemic was partly due
to the conditions resulting from the great fire earlier in the same year. Charleston
Mercury, Sept. 13, Oct. 26, 1838; Niles' Register, LV, 52, 161.
 

jgoodguy

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#16
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
PP 25-26

Several proposed plans and measures include capital associations of Southerners to invest in the importing business. States followed through by the legislation enabling limited partnerships. Men of means were encouraged to invest in these limited partnerships. It was suggested that due to an overproduction of cotton, planters could invest in these partnerships 'otherwise than in land and negroes.' Unfortunately, high cotton prices sabotaged this. Once established, the profits that once flowed North would be available for further investment.

Various plans and measures were suggested for promoting direct importations of foreign goods. Some were intended to overcome the obstacle to direct trade which lay in the lack of mercantile houses with sufficient capital to enable them to embark in the importing business. The first Augusta convention took the view that, while individual merchants were not possessed of resources necessary, the requisite capital could be got together by associations of individuals, and to that end it appointed a committee to memorialize the state legislatures in behalf of limited co-partnership laws. In response to the committee's memorials the legislatures of Virginia, South Carolina, Georgia, Alabama, Tennessee, and Florida Territory enacted the desired legislation, and subsequent conventions urged men of means to avail themselves of the opportunity thus afforded.38 The opinion was expressed that there was an overproduction of cotton in the South, and that planters could profitably invest a portion of the proceeds of their crops otherwise than in land and negroes. If for a few years the planters would apply one-half their net income to commerce, abundant capital would be supplied to conduct the whole foreign commerce.39 This suggestion, however, could not carry great weight, for, though subject to fluctuation, it was not until 1839 that there was a marked decline in cotton prices, and the average for the years 1835 to 1839 was fourteen cents, a higher average than that of any equal period since 1820 to 1824.* The question of capital, it was considered, would be a serious one only while the revolution in trade was being effected, for, once established, the profits of direct importations would supply the capital requisite for their continuance.41​
Footnotes.​
38Savannah Daily Republican, April 6, 10, 1838; Niles' Register, LV, 43, 189.
The Charleston convention adopted a resolution directing the chairman to ap-
point and designate the spheres of committees whose duty it should be to call
meetings of the people and recommend to them to invest a portion of their surplus
capital in limited partnerships with merchants in trading centers and towns
of their respective states. Charleston Courier, April 19, 1839.
39Ibid., Oct. 24, 1837; DeBow's Review, IV, 222.
40Donnell, E. J., History of Cotton, passim.
41Savannah Daily Republican, April 10, 1838.
 

jgoodguy

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#17
Economic Aspects Of Southern Sectionalism, 1840-1861 Russel
University of Illinois Studies in the Social Sciences, V11, No. 1-2, March-June, 1923
Economic aspects of southern sectionalism, 1840-1861Emphasis mine.
PP 27-28

During the panic of 1837 many banks suspended specie(Gold/Silver) payment. This sunk the banking reform suggested.

Other recommendations of the direct trade conventions dealt with the great obstacle to direct trade which lay in the inadequacy of credit facilities in the South. The second Augusta convention was especially detailed in its recommendations. It requested banks to form European connections that they might be able to assist importers with letters of credit. It recommended that the banks in the seaports discount paper from the interior for the importing merchants paper for longer periods than six months as well as for shorter periods. The banks of the interior were requested to cooperate by collecting and remitting the proceeds of such paper to the coast with as little delay as possible. "It is not to be concealed that without the aid and support of the banks, the difficulties in our way will be greatly multiplied. It will depend upon them, in great measure, to determine the fate of our great measure."42 The banks had suspended specie payment in May, 1837, and were beset with great difficulties. The convention devised a plan for equalizing the domestic exchanges and keeping up the credit of the banks during the period of suspension. In substance the plan was that the banks of the principal Southern cities receive each other's notes and adopt some sort of a clearinghouse system and that other banks maintain the value of their notes and keep down the rates of exchange by redeeming their notes at the seaports. A committee was appointed to urge the banks to adopt the plan.43 The plan had good points, but was too complicated to be adopted at the time. The banks did make a more or less concerted effort to resume specie payments in 1838, but after a few months were again forced to suspend, in October, 1839. The Virginia conventions contented themselves, after hot discussions, with passing resolutions asking the legislatures of Virginia and North Carolina to authorize increases of banking capital.44​
 

John Hartwell

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#18
Thank you for leading us through this, jgg. It's very informative, particularly to me, for whom economics is among the least appealing of subjects.

But, aren't these "complaints" about northern economic dominance more the result of a lack of enterprise on the part of southerners? They lament that the people of the North were doing what they, themselves, apparently made little effort to do; and wound up idealizing their own agrarian lack of resourcefulness, while demonizing the "grasping, greedy" Yankees for filling the niches they neglected -- but sure enjoyed complaining about.
 
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jgoodguy

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#19
Thank you for leading us through this, jgg. It's very informative, particularly to me, for whom economics is among the least appealing of subjects.

But, aren't these "complaints" about northern economic dominance more the result of a lack of enterprise on the part of southerners? They lament that the people of the North were doing what they, themselves, apparently made little effort to do; and wound up idealizing their own agrarian lack of resourcefulness, while demonizing the "grasping, greedy" northerners for filling the niches they neglected.
My pleasure in exploring this with everyone. It seems to be that way. OTOH the Northerners harbored misconceptions about Southerners too. IMHO in economic terms, these conventions were trying to solve a problem that did not exist. If direct imports were important enough to be profitable enough then demand would have solved the problem, there simply was not enough demand. The longer social answer is that these conventions will create a resentment that will later combine with the slavery issue for a toxic mix. We are investigating how sectionalism evolved from economic concerns.
 
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#20
Good thread. See page 103. https://www2.census.gov/library/publications/decennial/1860/preliminary-report/1860e-06.pdf?#
The circulation of periodicals almost doubled between 1850-1860, reaching about 927M. The press was concentrated in Massachusetts, New York and Pennsylvania.
This was a result of both falling printing costs and a rising standard of living. It was going to be very hard for the slave economy for exist with that literate society either attached to it or next door. The revolution in Britain allegedly was noticeable by 1822.
 



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